Prospector's Guide to Diamonds

Diamonds are a Geologist's Best Friend

Nov. 2010: A rare pink diamond sold for the highest price in history at an auction in Switzerland. The 24.78 fancy pink diamond was sold at a Sotheby's auction for a record US$46 million (or $1.86 million/ct). This beat the old record for the 35.56-carat Wittelsbach blue diamond that sold for more than $24 million in 2008. The emerald cut pink diamond was apparently last seen on the market 60 years ago. Another diamond that is up for auction is also expected to bring a high price - a pear-shaped 26.17 carat flawless diamond from the ancient Golconda mines of India. Photo - EPA (European Press Association).

BAFFIN ISLAND DISCOVERY

Peregrine Diamond Company made a major diamond discovery on their Chidliak project on Baffin Island in Canada. A bulk sample returned 6.3 ct/tonne with one half of the sample returning 10.5 ct/tonne! As a comparison, most commercial kimberlites and lamproites yield average grades of 0.15 to 6.8 ct/tonne. The incredibly rich Argyle diamond mine in northern Australia mined ore for many years that averaged 6.8 ct/tonne. Peregrine’s stock more than doubled following the announcement.

GIANT DIAMOND RECOVERED

The great Premier Diamond Mine of South Africa was established in 1902 and soon became the source of many diamonds including the largest ever found. The mine lies 25 miles east of Pretoria and was renamed as the Cullinun mine in 2003.

The largest diamond ever found was named the Cullinun. This monster was fist-sized and weighed 3,106 carats – so far, no other diamond has come close to it in size. When found, the Cullinun was a cleaved diamond, meaning that this extraordinary stone was broken along a cleavage plane and the other half still remains to be found. Based on the morphology of the diamond, the lost half was smaller, but not by much. The Cullinun was priceless. As a result, it was faceted into some of the more beautiful gemstones on earth and placed in the crown jewels of England.

Last month, another large diamond was found at the Premier (Cullinun) mine. This diamond is nearly flawless and will pay for the operation of the Cullinan Mine for at least two years and is the 18th largest diamond ever found. This diamond is the size of a hen’s egg. It is a white diamond of 507.55 carats found on September 24th, 2009 and estimated to be worth US$20 million uncut. The faceted stones from this giant rough will likely sell for 10+ times the value of the rough stone.

List of largest gem-quality rough diamonds discovered in the world

Name

Country of discovery

Year of discovery

Carat Weight

Position

Cullinan

South Africa

1905

3,106

1

Excelsior

South Africa

1893

995

2

Star of Sierra Leone

Sierra Leone

1972

969.80

3

Incomparable

Zaire

1984

890

4

Great Mogul

India

1650

787

5

Millennium Star

Zaire

1990

777

6

Woyie River

Sierra Leone

1945

770

7

Golden Jubilee

South Africa

1985

755

8

President Vargas

Brazil

1938

726.60

9

Jonker

South Africa

1934

726

10

Jubilee-Reitz

South Africa

1895

650.80

11

Unnamed

South Africa

1984

620.14

12

Sefadu

Sierra Leone

1970

620

13

Kimberley Octahedral

South Africa

616

14

Lesotho Promise

Lesotho

2006

603

15

Centenary

South Africa

1986

599

16

De Grisogono

Central Africa

587

17

Unnamed

South Africa

2009

507

18

Jacob-Victoria

South Africa

1884

457.50

19

Zale light of peace

Sierra Leone

1969

435

20

De Beers

South Africa

1888

428.50

21

Niarchos

South Africa

1954

426.50

22

Press Release 8/14/2009

GEOLOGIST NOMINATED FOR AMERICAN ORDER OF MERIT

Dan Hausel, consulting geologist in Arizona, was nominated for the American Order of Merit. Hausel, a geologist of note, researched gold, diamond and colored gemstone deposits over the past 35 years and is considered a specialist in Archean greenstone belts and gold mineralization (very old volcanic-sedimentary terrains), and diamond and colored gemstone deposits. Over the past 30 years, he was recognized as the most productive geologist in the history of the Wyoming Geological Survey and presented numerous awards including the American Association of Petroleum Geologist’s President’s Award, the Wyoming Geological Association’s Distinguished Service Award, IBC’s Archimedes’s Award of Geological Sciences, the National Rock Hound and Lapidary Hall of Fame’s Education Award. He was also employed by numerous gold and diamond exploration companies and former Deputy Director of the WGS and VP of Exploration for DiamonEx Ltd.

Over the years, his work led to hundreds of mineral discoveries including discovery of the Rattlesnake Hills gold district, world-class colored gemstone deposits in the central Laramie Mountains, hundreds of diamond deposits in Colorado, Montana and Wyoming, and contributions to the Donlin Creek gold deposit discovery (considered to the largest undeveloped gold deposit in North America). Hausel also authored nearly 700 publications including several books and mapped more than 1000 km2 of complex geological terrain.

He is a member of 15 Halls of Fame in martial arts & science and a member of several dozen Who’s Who compendiums. Recently, J.M. Evans, President of the American Biographical Institute contacted Hausel stating,

“I am writing to inform you that we wish to induct you into the American Order of Merit …. Your achievements and dedication … make you a perfect inductee. Dr. Hausel, you are an inspiration to those around you. On behalf of the Institute, I send my heartfelt thanks for the accomplished and honorable example you are demonstrating to others”.

Nov. 5, 2007

Diamonex Limited Acquires Kimberlite Pipes In USA

Sydney, Nov 5, 2007 (ABN Newswire) - In a significant expansion of its business, DiamonEx Limited has acquired a known diamondbearing exploration project, the Sloan 1 and 2 kimberlite pipes, in the United States of America. Announcing the acquisition today, DiamonEx Managing Director Mr Dan O'Neill said the US acquisition provided a second stage in the company's strategy of acquiring and developing advanced diamond exploration projects on a global basis. The Brisbane-based diamond exploration, mine development and mining company is currently bringing into production the Lerala diamond mine in Botswana. Mining is scheduled to commence at Lerala in November 2007 and diamond production in early 2008. The Lerala Mine is expected to produce an average of 330,000 carats per year over 10 years.

In the United States, DiamonEx has taken out an option to purchase the mineral rights to 160 acres (64.75 hectares) containing the Sloan 1 and 2 kimberlite pipes, in the State Line district of northern Colorado. DiamonEx has also acquired more than 1000 acres (>400 hectares) of prospective diamond properties in the State Line and adjacent Happy Jack districts. Consulting geologist for the company, Dan Hausel identified another 300 prospective targets in the region where the company will undertake exploration with a view to making new kimberlite discoveries.

"DiamonEx has maintained rapid momentum in bringing the Lerala mine into production less than four years after the company listed," Mr O'Neill said. "We now plan to accelerate even further with the United States project which is potentially bigger than our successful initial development in Botswana.

"Like Lerala was when DiamonEx acquired it, the new project is considerably advanced in that the kimberlite pipes are known to contain diamonds. It is located in the United States which represents 50% of the world's market for gem diamonds, yet there are no diamond mines in the country."

Mr O'Neill said that, in making the acquisition, DiamonEx had engaged as consultant Mr Dan Hausel, former Deputy Director and Senior Economic Geologist with the Wyoming Geological Survey and an authority on diamonds in the United States, who had advised that:

- Since 1998, North America has become a major source of gem-quality diamonds and could possibly become the world's largest producer.

- The greatest potential for the discovery of commercial diamond deposits in the US lies within the Wyoming Craton within which the Colorado-Wyoming State Line district is located.

- The principal primary diamond deposits in the United States are located in the Colorado- Wyoming State Line district.

- The State Line district is the largest kimberlite district in the US.

- More than 40 known diamond pipes and dykes had been identified in the State Line district in the past.

- The interconnected Sloan 1 and 2 kimberlite pipes and the transitional zone between, cover a surface area of 9.3 Ha and have been estimated by previous explorers to contain a non-JORC resource of 27.5 Million tonnes to a depth of 122 metres. Bulk sampling undertaken by previous explorers suggests grades ranging from 1.2 to 59.8 cpht.

- 2,698 tonnes of hypabyssal kimberlite were processed from a 187 metre long, 2.5 x 2.5 metre adit excavated in Sloan 2 by a previous explorer in 1994. The average grade reported was 12.68 cpht, assuming a 2mm cut off. The largest stone recovered was a 5.51 carat white octahedron. This adit explored approximately half the know length of the Sloan 2 portion of the Sloan Ranch kimberlite complex.

- Bulk sampling from the Sloan 1 and 2 kimberlites have yielded a total of 39,616 diamonds over the 1980's and 1990's. The primary source of diamonds at Sloan is eclogite.

- Recovered diamonds from past exploration and mining operations in the State Line district ranged from microdiamonds to a 28.3 carat gemstone that reportedly sold for over US$300,000. Gem-quality macrodiamonds greater than 5 carats in weight recovered from past operations in the district include stones of 5.5, 6.2, 9.4, 10.5, 11.9, 14.2, 28.2 and 28.3 carats and an octahedral chip estimated to have fragmented from a 80 to 90 carat stone.

- Diamonds from the former Kelsey Lake diamond mine in the northern portion of the State Line district were primarily white to colourless stones. Coloured stones trended towards honey brown. Large canary yellow stones were also recovered including some smaller pink and blue diamonds.

- The State Line district is located along the edge of the Wyoming Craton. This Craton encloses the two largest kimberlite districts and the largest lamproite field in the US along with several hundred kimberlitic indicator mineral anomalies. The Wyoming Craton is part of the larger North American Craton that continues to the north under Canada where several hundred kimberlites have been found in the past few decades including a group of commercial diamond deposits.